Our opposition seeds stories (CNBC) in the media pretty frequently like this. They try to make it seem like getting a discharge on student loans in bankruptcy is possible for most people. It is not. AB: Alan is voicing his displeasure with media claiming many people are getting student loan relief. They are not. In the end the battle for relief for another 40 million people needs to occur.
“More student loan borrowers walk away from their debt in bankruptcy,” says cnbc.com, Annie Nova.
Alan Collinge: The FACT? In the past year, “FEWER THAN 45” people have received discharges on their student loans in bankruptcy. This according to recent reports in the New York Times, Business Insider, etc. We don’t know how few, but my guess is 1-2 dozen, perhaps less. This is out of 150,000- 200,000 people with student loans who file every year.
This is a “success” rate of 0.03%. At most.
The Trick: The 99% discharge rate they claim is ONLY for cases where a judgement/order is ultimately made. The vast majority of these cases probably ended with the borrowers being told that they had to sign up for an IDR plan instead of getting a discharge.
What’s more: Of the 650 people who paid several thousand dollars on top of their standard bankruptcy filing fees to attempt this process, the failure rate was greater than 90%
** Side Note: Notice how they talk about borrowers “walking away” from their student loans in the headline? That’s an editor’s trick to make us seem like bad people.
DON’T FALL FOR IT!
Shame on CNBC for publishing this obvious propaganda. Here is a far more accurate article if you want to know the truth about student loans, bankruptcy, and the new bankruptcy process.
New Bankruptcy Process for Student Loans is Proving to be a Cruel, Dangerous Joke for Borrowers, Medium, Alan Collinge.
“Undue Hardship remains, is only transferred from open court to the bowels of the Administrative State. As before, very few borrowers are seeing any relief.“
Click on the Medium link for the rest of Alan’s commentary.